ABC manufacturing company forecasts the following demand for a product over the next four years.

(a) Currently, the manufacturer has six machines that operate on a 2-shift basis of 8 hours each. Assume there are 280 workdays in a year. Each product takes 30 minutes to produce. There is no outsourcing or overtime during this period.
Apply the relevant technique to determine the number of units to be produced each year and the ratio of demand to capacity each year.
Based on these values, does the company need to buy more machines? If yes, how many extra machines are required using the level strategy? If not, please justify.

(b) Select a business that you are familiar with. Show examples of customers using search, experience and credence attributes to evaluate the goods or service.
 

Transcribed Image Text:

Year Forecast demand 1 50,000 2 67,000 3 78,000 4 84,000 Year Forecast demand 1 50,000 2 67,000 3 78,000 4 84,000

Answer rating: 100% (QA)

Solution a To determine the number of units to be produced each year and the ratio of demand to capacity we can use the following formula Units to be produced Demand 2 x Number of ... View the full answer